Correlation Between Sequoia Financial and Leeuwin Metals
Can any of the company-specific risk be diversified away by investing in both Sequoia Financial and Leeuwin Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sequoia Financial and Leeuwin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sequoia Financial Group and Leeuwin Metals, you can compare the effects of market volatilities on Sequoia Financial and Leeuwin Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sequoia Financial with a short position of Leeuwin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequoia Financial and Leeuwin Metals.
Diversification Opportunities for Sequoia Financial and Leeuwin Metals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sequoia and Leeuwin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sequoia Financial Group and Leeuwin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leeuwin Metals and Sequoia Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sequoia Financial Group are associated (or correlated) with Leeuwin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leeuwin Metals has no effect on the direction of Sequoia Financial i.e., Sequoia Financial and Leeuwin Metals go up and down completely randomly.
Pair Corralation between Sequoia Financial and Leeuwin Metals
Assuming the 90 days trading horizon Sequoia Financial is expected to generate 9.65 times less return on investment than Leeuwin Metals. But when comparing it to its historical volatility, Sequoia Financial Group is 18.44 times less risky than Leeuwin Metals. It trades about 0.49 of its potential returns per unit of risk. Leeuwin Metals is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Leeuwin Metals on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Leeuwin Metals or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sequoia Financial Group vs. Leeuwin Metals
Performance |
| Timeline |
| Sequoia Financial |
| Leeuwin Metals |
Sequoia Financial and Leeuwin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sequoia Financial and Leeuwin Metals
The main advantage of trading using opposite Sequoia Financial and Leeuwin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequoia Financial position performs unexpectedly, Leeuwin Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Leeuwin Metals will offset losses from the drop in Leeuwin Metals' long position.| Sequoia Financial vs. Australian Unity Office | Sequoia Financial vs. Gold Road Resources | Sequoia Financial vs. Centrex Metals | Sequoia Financial vs. Perseus Mining |
| Leeuwin Metals vs. Stelar Metals | Leeuwin Metals vs. Dalaroo Metals | Leeuwin Metals vs. Aurelia Metals | Leeuwin Metals vs. Sky Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |